On September 1, the Hub facilitated a Kenyan apparel factory visit for USAID Deputy Administrator for Africa Linda Etim. There, she witnessed firsthand the manufacturing of African products destined for the U.S. market through the African Growth and Opportunities Act (AGOA). She also had the opportunity to discuss the importance of the Kenyan apparel industry for job creation and economic growth.
In June 2015, the U.S. Government extended trade preferences under AGOA to qualify African countries for an unprecedented 10 years, including the critical third country fabric provision. This was a game changer for Kenya and other East African countries, enabling long-term investment and driving governments to take real measures to facilitate trade.
“Kenya has actually been one of the most forward-leaning East African countries. When we were introducing AGOA, it was first in adopting the policies required under AGOA. We have already seen 400 million dollars in exports from Kenya since 2015, when the AGOA expansion came through. In addition, we are seeing one of the most creative and active workforces being developed and created here. And, it happens to be the center of USAID’s Trade and Investment Hub, so we see a lot of opportunity in Kenya, both with the workforce, and with the willingness of the government, and I think a lot of creativity with the partners and the companies that are engaged here," said USAID Deputy Administrator for Africa Linda Etim.
Chief purchasing officers from high volume apparel firms have signaled their desire to shift more of their sourcing from Asia to East Africa. Kenya and Ethiopia top the list of desired East African locations (2014 McKinsey & Company survey).
“The ten year AGOA extension has provided us with the opportunity to do more business with the U.S buyers and thus creating more jobs in our factory here in Kenya,” said United Apparel Limited (UAL) Chairman Pankaj Bedi. (The factory that Deputy Administrator Etim visited.)
UAL is a leading Kenyan exporter of apparel to the U.S. and has been certified by a number of large U.S. retail chains, including Levi Strauss & Co and H & M. The company currently employs 7500 employees.
In 2004, the year before USAID sponsored UAL at its first American trade show, annual UAL sales were $13.4 million. Today, UAL annual sales are closer to $75 million.
UAL is in the middle of an expansion; a new unit of seven production lines were just completed. The current expansion took UAL’s production capacity from an average production of 31,000 garments a day to an average production of 38,000 garments per day. Most of these garments are blue jeans destined for the U.S. market.